What is poverty?
Poverty is a situation where people do not have enough income, resources or opportunities to meet their basic needs and live a decent life. Basic needs include food, clean water, shelter, clothing, healthcare and education.
For students, the easiest way to remember poverty is: poverty means people cannot enjoy a reasonable standard of living.
United Nations definition of poverty
The United Nations describes poverty as more than a lack of money. It is a denial of choices and opportunities, a violation of human dignity, and a lack of basic ability to participate fully in society.
This means poverty is not only about income. It can also mean poor housing, poor health, limited education, insecurity and exclusion from society.
Absolute poverty and relative poverty
Poverty can be measured in different ways. The two most common types are absolute poverty and relative poverty.
| Type of poverty | Meaning | Simple example |
|---|---|---|
| Absolute poverty | People cannot afford the basic goods and services needed for survival. | A family cannot afford enough food, safe drinking water, basic shelter or essential healthcare. |
| Relative poverty | People are poor compared with others in the same country or society. | A household may have food and shelter, but cannot afford normal living standards such as internet access, school materials or suitable clothing compared with most people in that country. |
Exam tip: absolute poverty is about basic survival. Relative poverty is about being poor compared with the average living standard in society.
Causes of poverty
Poverty usually has more than one cause. The main causes are explained below in simple language.
Unemployment
People without jobs may have little or no income, making it difficult to afford basic needs.
Low wages
Some people work but still remain poor because their wages are too low to cover living costs.
Illness
Illness can stop people from working and may also increase medical expenses.
Age
Older people may be poor if they cannot work and do not have enough savings or pension income.
| Cause | How it can lead to poverty |
|---|---|
| High population growth | If population grows faster than jobs, schools, healthcare and housing, many people may struggle to access basic services. |
| Reliance on the primary sector | Countries depending heavily on farming, fishing or mining may face low incomes because prices can be unstable and productivity may be low. |
| Low literacy rates | People who cannot read and write well may find it harder to get skilled jobs, understand information or start successful businesses. |
Simple poverty cycle
- Low income can lead to poor nutrition and poor health.
- Poor health and low education can reduce productivity.
- Low productivity can lead to low wages or unemployment.
- This can keep households in poverty unless support is provided.
Policies to alleviate poverty
Governments can reduce poverty by increasing income, improving opportunities and supporting vulnerable groups.
| Policy | How it helps reduce poverty | Easy example |
|---|---|---|
| Promote economic growth | Economic growth can create more jobs and raise household incomes. | Government investment in roads and industries creates employment. |
| Improve education | Education increases skills, productivity and the chance of getting better-paid work. | Free schooling, adult literacy programmes and vocational training. |
| Provide generous state benefits | Benefits give financial support to unemployed, elderly, disabled or low-income households. | Unemployment benefits, pensions, child benefits and housing support. |
| Use progressive taxation | Higher-income earners pay a larger percentage of income in tax, allowing the government to fund support for poorer households. | Tax revenue is used for free healthcare, education or income support. |
| Introduce or increase the national minimum wage | A national minimum wage can raise the income of low-paid workers. | Workers in low-paid jobs receive a higher legal minimum hourly wage. |
Quick check
- Absolute poverty means basic needs cannot be met.
- Relative poverty means people are poor compared with others in their society.
- Poverty may be caused by unemployment, low wages, illness, age, population growth, reliance on the primary sector and low literacy.
- Policies to reduce poverty include growth, education, state benefits, progressive taxation and a national minimum wage.
Easy exam method
- Define poverty clearly.
- Identify the type — absolute or relative.
- Explain one cause using a simple example.
- Explain one policy and how it reduces poverty.